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Tuesday, 1 August 2017

Builders take Centre to court, say RERA illegal

Earlier builders’ demand to exclude incomplete projects was turned down by the Centre saying the law was enacted to bring relief to crores of home buyers who had been waiting for their flats for years

NEW DELHI: A bunch of builders have approached two
high courts challenging some of the key provisions in the Real Estate
Regulation Act (RERA) including binging all “ongoing” projects under regulation
and penalties for failure to register such projects. They have pleaded that
these provisions have retrospective effect since the projects were started when
there was no such law and hence it’s illegal.

Earlier builders’ demand to exclude incomplete
projects was turned down by the Centre saying the law was enacted to bring
relief to crores of home buyers who had been waiting for their flats for years,
even after making full payment. According to the law, the mandatory
registration of incomplete and new projects with the regulator will have to be
done by August 1, else the builders face the risk of paying penalties.

The builders have been opposing this provision amid
reports that most of them are cash strapped. Moreover, the law brings
transparency and accountability and property developers have to give fresh timelines
for completion of projects. The timelines will have to be adhered to.

While Builders and Developers Welfare Association has
filed a PIL in Madhya Pradesh High Court, Swapnil Developers has challenged
provisions of RERA in the Nagpur bench of Bombay High Court. These cases are
coming up for hearing in the next one week.

Sources in the housing and urban affairs ministry said
RERA is not a law with retrospective effect since it covers all projects, which
have not got completion certificate by May 1, 2017. Secondly, the penal
provisions come to effect only after the law came to existence.

Till now 22 states and seven Union Territories have
got proper or interim regulators and real estate projects can be registered
with them.

Builders have challenged the Centre’s right to enact
the law relating to land, which is a state subject, and how submitting details
of projects to the regulator would amount to infringement of right to privacy.

“The law came into force in March 2016 and there was
enough time to complete the ongoing projects. The law says the builders will
have to give fresh timeline while registering all projects including the
ongoing ones,” a government official said.

He added that the law has been made under the relevant
constitutional provisions of the Concurrent List and the ministry had even
obtained opinion of the law ministry in June 2012. “The RERA does not provide
for matters relating to ‘land’ or ‘local authority’. It aims to regulate the
contractual obligations between the builders and buyers. It focuses on
resolving disputes in the sector,” the official added.